A shift to organic and locally grown produce has helped the industry remain resilient
New York, NY (PRWEB) September 23, 2014
Given the nondiscretionary nature of the industry's products, revenue for the Fruit and Vegetable Markets industry is generally stable; however, rising produce consumption and fruit prices benefited operators over the five years to 2014. Furthermore, sales for the industry follow unique preference and demographic trends, including a focus on healthy eating and the aging US population. While per capita fruit and vegetable consumption declined at an annualized rate over the five-year period, rising population levels offset this trend, causing total fruit and vegetable consumption to rise. As a result, industry revenue is expected to increase at an annualized rate over the five-year period; however, an expected sharp decline in vegetable prices in 2014 will likely cause industry revenue to decrease during the year.
According to IBISWorld Industry Analyst Stephen Hoopes, “The industry faces strong competition from traditional and nontraditional fruit and vegetable retailers like supermarkets and mass merchandisers.” An increase in fruit and vegetable sales accounted for by these retail outlets directly takes revenue away from industry operators. The Supermarkets and Grocery Stores industry (IBISWorld report 44511) accounts for a massive portion of the total retail food market, which does not leave much room for comparatively niche fruit and vegetable markets. However, a shifting focus to organic and locally grown produce has helped the industry remain resilient. In fact, the number of industry enterprises has increased over the five-year period. Organic offerings, which come with substantial price markups, have provided an incentive for new market entrants and expanded the industry's average profit margin.
The continued focus on health and organic foods is anticipated to drive the industry over the five years to 2019, with revenue increasing at an annualized rate. “While per capita produce consumption is anticipated to remain constant, population increases are forecast to continue, raising total produce consumption at a rate similar to the previous five-year period,” says Hoopes. To increase consumer produce consumption, government and private entities will emphasize the benefits of a healthy diet through campaigns and industry technology grants. Additionally, the rebounding economy will allow consumers to feel more comfortable making higher-priced purchases of organic produce, boosting industry performance.
For more information, visit IBISWorld’s Fruit & Vegetable Markets in the US industry report page.
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IBISWorld industry Report Key Topics
Fruit and vegetable venders sell a variety of produce through stands, farmers’ markets and retail locations where products are sold directly to the public. The industry’s permanent stands and markets are small and individually owned. This unique industry generates revenue from the sale of fruits and vegetables and excludes sales of produce generated from supermarkets, grocery stores and mass merchandisers.
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